Moving closer to internet sales tax — won’t cure state budget woes

The U.S. Senate today took another step toward passing the Marketplace Fairness Act. The Hill reports,

In a 75-22 vote, the Senate proceeded to The Marketplace Fairness Act, S. 743, which would empower states to collect taxes on purchases made online by consumers in their states.

The latest vote suggests supporters of the bill are likely to see it win approval in the Senate later this week. Its path through the House, despite the support of many GOP governors, is less clear.

As the Washington State Wire notes, at one time Olympia had high hopes for a revenue windfall. Now, not so much. From high-end estimates (guesses? hopes?) of $1 billion, the take now appears to be about $184 million, welcome but not enough to bridge the gap between the House and Senate budgets.

The Seattle Times has state lawmakers’ reactions. Wisely, no one is counting on anything.

“Counting that the U.S. Congress would actually do anything related to taxes seems absurd to me,” Rep. Ross Hunter, D-Medina, the chief budget writer for House Democrats, said in an email. ”If it happens life is good. If not we keep working.”

State Sen. Andy Hill, R-Redmond, the lead budget writer for the state Senate’s GOP-led majority caucus, agreed it wouldn’t be prudent to bank that cash in the current budget. But Hill said he hopes Congress will eventually get there. “I think long term it is going to happen,” he said.

James Pethoukis at the American Enterprise Institute writes that Internet sales taxes can be pro-growth, not just a state money grab.

Politico has a good piece on the battle between Amazon (for the legislation) and eBay (against it), which may remind folks of another epic conflict.

 

There’s still a long way to go before the tax becomes reality. And it’s way to early to be counting the dollars in the state budget.